Cabinet Office of the Prime Minister

Digital Success Programme

Hundreds of thousands of Hungarians are receiving higher salaries this week

February 6, 2018 2:12 PM

“Hundreds of thousands of Hungarians will be receiving higher salaries at the beginning of this month thanks to the wage increases that came into effect on 1 January”, Parliamentary State Secretary Csaba Dömötör from the Cabinet Office of the Prime Minister said at a press conference on Tuesday.

“We are taking further important steps to ensure that it is worthwhile for everyone to work in Hungary and everyone’s work is duly appreciated”, the State Secretary stressed. “In addition to the work of the Hungarian people, both the good performance of the Hungarian economy and the tax cuts are enabling these wage increases, and their effects are being reinforced by our family support schemes”, Mr. Dömötör added.

“The minimum wage is 8 percent higher than it was last year and the minimum wage for skilled workers is 12 percent higher, in addition to which as part of the career model for law enforcement employees military personal and police officers will also be receiving higher salaries, and furthermore people employed in higher education and at state-owned companies, including postal and rail workers, will also be taking home more money”, he explained.

According to the State Secretary, wage increases are not only occurring within the public sector, but also in the private sector, and this is being enabled by the stable Hungarian economy and is also being facilitated by tax cuts. “Personal income tax is still at a flat rate and taxes on employers were further reduced in January, and these measures are providing enterprises with more room for manoeuvre to increase wages”, he said.

Mr. Dömötör also said that family tax subsidies are also increasing the level of take-home pay, and since the introduction of these tax benefits some 1900 billion forints (EUR 6.1bn) has remained in the pockets of families with children, and these benefits have now been increased further in view of the fact that families with two children will now be able to deduct 35 thousand fronts from their taxes.

“One of the things that is at stake at the upcoming elections is also whether these achievements can be protected”, he stressed, noting that “It is a good thing that the extra resources being generated by the Hungarian economy can be spent on these wage increases instead of on immigrants, as many in Brussels would like”.

“According to the proposals they have made public so far, the opposition parties are not supporting our policy of wage increases; the opposition would like to increase the level of personal income tax, is thinking in terms of a multi-rate tax system, and wants to terminate the family support system in its current form”, he highlighted. “In future we, however, will continue to strive to assure that everyone is able to take further steps forward in their own lives through career models, targeted wage increases, tax cuts and the expansion of the family support system”, he declared.

Minister of State for Labour Market and Vocational Education Péter Cseresznyés recalled: “In accordance with the six-year wage agreement concluded in November 2016, the Government increased the minimum wage by 15 percent and the guaranteed minimum income by 25 percent from January 2017, and the minimum wage increased by a further 8 percent from January 2018”. “This means that the minimum wage grew from 73,500 forints in 2010 to 138 thousand forints in 2018, and increase of 88 percent”, he continued.

“The guaranteed minimum income has increased by an even greater extent, by 102 percent compared to 2010, and skilled workers are taking home a minimum of 180,500 forints from January 2018”, he added.

Mr. Cseresznyés also said that real wages have been increasing continually since 2013, for 59 consecutive months, by a total of 35 percent and by 10.2 percent in the first 11 months of 2017.

“Real wages will continue to increase this year, according to all forecasts. The 6-year wage agreement has also significantly reduced the taxes on wages, with mandatory contributions falling from 27 percent to 22 percent, and a further decrease of 2.5 percentage points to 19.5 percent in 2017”, he highlighted.

In reply to a question on what the Government is doing to prevent certain companies from cheating the system and downgrading employees in an attempt to avoid having to pay them more, the Minister of State said: “We received reports of this nature last year, but inspections have not uncovered a large number of such cases”, adding that labour inspectors and officials from the Tax and Customs Administration will continue to hold inspections this year.

Mr. Cseresznyés was also asked his opinion with regard to statements by the former education director of the Hungarian Chamber of Commerce and Industry concerning the dumbing down of the vocational training system. According to the Minister of State for Labour Market and Vocational Education, students involved in vocational training are continuing to be taught all of the skills they have been acquiring so far, and that it sufficient to enable them to complete their studies successfully.

In reply to a question, Mr. Dömötör said it was absurd and outrageous that Ahmed H. has taken the Government to court over the National Consultation, claiming 8 million forints in damages and asking for a public apology. In explanation, he said that we are after all talking about an illegal immigrant who threw stones at Hungarian police officers at the border, and his release is being demanded by organisations that receive their funding from abroad, noting that the case is also outrageous because Ahmed H’s lawyer is a former socialist minister. Accordingly, he called on MSZP politician Gergely Karácsony to clarify the situation. “We have already seen that they want to demolish the border security fence, but it now seems that they are also protecting criminal immigrants”, he noted.

Also in reply to a question, Mr. Dömötör said claims by DK politician Ágnes Vadai according to which the Government had allowed terrorists into Hungary through simplified naturalisation were absurd. “No immigrants have been allowed into the country”, he stressed. In reply to a question concerning statements by László Kövér relating to the Election Act, the Minister of State said: “The Hungarian Election Act guarantees equal opportunities to all political parties”.